NCAA's strongest argument might be cap limit

Published 9:05 pm, Monday, August 18, 2014

INDIANAPOLIS — The NCAA's best argument against the Ed O'Bannon ruling might be the financial limits imposed by U.S. District Judge Claudia Wilken — the same ones the NCAA lauded in her decision.

Less than two weeks after the court decision opened the door for college athletes to receive a small portion of the millions of dollars they help generate, several attorneys said they believe the NCAA should now attack that cap. Wilken ruled Aug. 8 the NCAA violated antitrust law by restricting schools from providing money beyond current scholarship limits to athletes.

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She said schools should be allowed to put up to $5,000 per year of competition into a trust fund for football players and men's basketball players, money that could be collected once they're done with school.

Legal experts question how she reached that number and wonder if it will hold up on appeal.

“The cap is inconsistent with a judicial decision that the restraint (of trade) is unreasonable,” said Robert McTamaney, an antitrust lawyer with the firm of Carter, Ledyard & Milburn. “If the restraint is unreasonable, out it goes, there's no partial remedy under the Sherman Act and, frankly, judges aren't supposed to construct one. Either it's good or it's not.”

Within an hour of the ruling, NCAA chief legal officer Donald Remy issued a statement noting that the governing body disagreed with the ruling but supported the cap. The NCAA, which faces a Wednesday deadline to appeal the decision, declined to comment.

Wilken said she set the $5,000 annual threshold to balance the NCAA's fears about huge payments to players.

“The number is immaterial, it's the concept,” said Jim Ryan, an attorney at Cullen and Dykman. “It does seem rather arbitrary. Why isn't it $3,000 or $10,000? She pulled the $5,000 somewhat out of the air, so it could be $3,000, it could be $10,000, what's a few thousand?”

In October 2011, the NCAA Board of Directors approved a $2,000 annual stipend for athletes, legislation that was shelved when more than 125 schools signed on to an override measure. The five richest conferences are attempting to bring back the stipend now that they have been given autonomy over some of the trickiest issues in college sports.

McTamaney believes if the stipend already were in place and Wilken applied the same logic to the O'Bannon case, the NCAA might already have won in court.

According to a study by Illinois professor Michael LeRoy, athletes suing the NCAA won 49 percent of the initial cases, but the NCAA won 71 percent of the appeals in the second and third rounds.

If the ruling stands, some worry it could ruin non-revenue sports, and others believe the NCAA could face additional litigation from female athletes who could argue they are not being compensated equally in violation of Title IX laws.